There have been several major accomplishments within the past fiscal year. First, correlated presynaptic and postsynaptic activity is the key factor in inducing Hebbian plasticity and memory. However, little is known about the physiological events that could mediate such coordination. Correlated cholinergic input induces spike timing-dependent plasticity-like hippocampal synaptic plasticity. Cholinergic receptors are localized to both presynaptic and postsynaptic glutamatergic sites and thus have the potential to coordinate presynaptic and postsynaptic activity to induce plasticity. By directly monitoring presynaptic and postsynaptic activities with genetically encoded calcium indicators in mouse septohippocampal cocultures, we found interactive but independent presynaptic and postsynaptic modulations in the cholinergic-dependent synaptic plasticity. Neither presynaptic nor postsynaptic modulation alone is sufficient, but instead a coordinated modulation at both sites is required to induce the plasticity. Therefore, we propose that correlated cholinergic input can coordinate presynaptic and postsynaptic activities to induce timing-dependent synaptic plasticity, providing a novel mechanism by which neuromodulators precisely modulate network activity and plasticity with high efficiency and temporal precision. Second, using mutagenesis and a combination of electrophysiology and imaging techniques, we discovered the possible involvement of an aspartate residue in the calcium permeability of the alpha7 nAChR. We found that the aspartate at position 44 appears to be essential since mutating it to alanine resulted in the complete disappearance of detectable calcium changes in most cells, which indicates that the extracellular domain of the alpha7 nAChR plays a key role in calcium permeation. Third, the alpha7 nicotinic acetylcholine receptor (nAChR) is highly expressed in different regions of the brain and is associated with cognitive function as well as anxiety. Agonists and positive allosteric modulators (PAMs) of the alpha7 subtype of nAChRs have been shown to improve cognition. Previously nicotine, which activates both alpha7 and non-alpha7 subtypes of nAChRs, has been shown to have an anxiogenic effect in behavioral tests. We compared the effects of the alpha7-selective agonist (PNU-282987) and PAM (PNU-120596) in a variety of behavioral tests in Sprague Dawley rats to look at their effects on learning and memory as well as anxiety. We found that neither PNU-282987 nor PNU-120596 improved spatial-learning or episodic memory by themselves. However when cognitive impairment was induced in the rats with scopolamine (1 mg/kg), both PNU-120596 and PNU-282987 were able to reverse this memory impairment and restore it back to normal levels. While PNU-120596 reversed the scopolamine-induced cognitive impairment, it did not have any adverse effect on anxiety. PNU-282987 on the other hand displayed an increase in anxiety-like behavior at a higher dose (10 mg/kg) that was significantly reduced by the serotonin 5-HT1a receptor antagonist WAY-100135. However the alpha7 receptor antagonist methyllycaconitine was unable to reverse these anxiety-like effects seen with PNU-282987. These results suggest that alpha7 nAChR PAMs are pharmacologically advantageous over agonists, and should be considered for further development as therapeutic drugs targeting the alpha7 receptors.